Nestle and Unilever, Ice Cream Market
In order for a company to succeed in a market, a sum of management activities and execution skills have to output a product/service that match the client’s expectancies and demands. The combination of the company’s skills that make the client choose their product over the competitors’ are called Critical Success factors in the industry. Ben and Jerry’s is seen as a superpremium brand (key buying factor. Ben and Jerry’s is one of the most well known ice cream brand in the U.
S. A. and, after being acquired by Unilever, it continued to develop it’s small company philosophy and operate as a semi- autonomous corporate inside Unilever group, developing its own worldwide strategies and not using the heart-shaped logo. Those are its main industry strategic success factors. As competition engines, its semi autonomous management allows Ben and Jerry’s to develop their own products and continue to have a close relationship with their customers. haggen daz – falta esta analise) Unilever is a multinational company that operates in many markets and market sectors all over the world. Unilever, along the years, have made huge investments to buy (financial resources) local brand ice cream names and take advantage of its positioning in the local markets (organizational resources). Unilever now covers certain common products with strong brand positioning such as Magnum, Cornetto and others that have been developed in the past 15 years (intangible/tangible assets).
Unilever strategy determines that the products and managements have to be adjusted according to the country they are sold (organizational resources). Unilever has developed strong distribution channels and maintained a close relation with retailers, specially smaller ones that are persuade to rent Unilever’s freezers and forced to sell their products (organizational resources).
On the other hand, large market share allows Unilever to explore economies of scale. Unilever’s main strengths are: local brand image through local ice cream brands acquisitions that allows Unilever to profit from different regional market shares; development of well positioned and profitable products such as Magnum and Cornetto; large market share that allows the company to explore economies of scale and strong distribution links with retailers.
Unilever main weakness is the lack of investment on confectionary market. To face the threat of Nestle and Mars advantage on the manufacturing market, the multinational licensed two global brands: Cart D’or (Toblerone ice cream) and Lavazza coffee ice cream (from Kraft Jacobs Suchard). The problem with the licenses is that the profits have to been shared between Unilever and the brand owners.
If I was thinking about entering the ice cream market, I would adopt a similar strategy as Unilever: buy local brands and try to adjust my management strategies according to the local client’s tastes and demands. The second main investment would be in physical assets such as manufacturing installations and machinery and freezers to give, not rent, to local stores, so I could always have my brands present in those small retailers. (Continuing)